FedEx (FDX)

FedEx maintains a
tax-qualified,
defined benefit pension plan called the FedEx Corporation
Employees Pension Plan (the Pension Plan). For
2007, the maximum compensation limit under a
tax-qualified
pension plan is $225,000. The Internal Revenue Code also limits
the maximum annual benefits that may be accrued under a
tax-qualified,
defined benefit pension plan. In order to provide 100% of the
benefits that would otherwise be denied certain
management-level
participants in the Pension Plan due to these limitations, FedEx
also maintains a supplemental
non-tax-qualified
plan called the FedEx Corporation Retirement Parity Pension Plan
(the Parity Plan). Benefits under the Parity Plan
are general, unsecured obligations of FedEx.

Effective May 31, 2003, FedEx amended the Pension Plan and
the Parity Plan to add a cash balance feature, which is called
the Portable Pension Account. Eligible employees as of
May 31, 2003

had the option to make a
one-time
election to accrue future pension benefits under either the cash
balance formula or the traditional pension benefit formula. In
either case, employees retained all benefits previously accrued
under the traditional pension benefit formula and continued to
receive the benefit of future compensation increases on benefits
accrued as of May 31, 2003. All eligible employees hired
after May 31, 2003 are only eligible to participate in the
Portable Pension Account feature.

In February 2007, the Board of Directors approved changes to the
Pension Plan and Parity Plan such that:



Effective June 1, 2008, eligible employees who participate
in the Pension Plan and the Parity Plan, including all of the
named executive officers (other than Mr. Sullivan), will
accrue all future pension benefits under the Portable Pension
Account, and those benefits will be payable after the employee
retires or terminates employment from FedEx.



Benefits previously accrued under the Pension Plan and Parity
Plan using the traditional pension benefit formula will be
capped as of May 31, 2008, and those benefits will be
payable beginning at retirement.

The Board also approved changes to FedExs
tax-qualified,
defined contribution 401(k) retirement savings plans, in which
the named executive officers participate. The 401(k) plan
changes include increasing the annual matching company
contribution from $500 to 3.5% of eligible earnings beginning
January 1, 2008. In order to provide 100% of the benefits
that would otherwise be denied participants in the
tax-qualified
401(k) plans due to certain limitations imposed by the federal
tax laws, Parity Plan participants, including the named
executive officers (other than Mr. Sullivan), will receive
additional Portable Pension Account compensation credits equal
to 3.5% of any eligible earnings above the maximum compensation
limit for
tax-qualified
plans ($225,000 for 2007).

FedEx maintains a tax-qualified, defined benefit
pension plan called the FedEx Corporation Employees Pension Plan (the Pension
Plan). In 2006, the maximum compensation limit under a tax-qualified pension
plan is $220,000. The Internal Revenue Code also limits the maximum annual
benefits that may be accrued under a tax-qualified, defined benefit pension
plan. In order to provide 100% of the benefits that would otherwise be denied
certain management-level participants in the Pension Plan due to these
limitations, FedEx also maintains a supplemental non-tax-qualified plan called
the FedEx Corporation Retirement Parity Pension Plan (the Parity Plan).
Benefits under the Parity Plan are general, unsecured obligations of FedEx.

Effective May 31, 2003,
FedEx amended the Pension Plan and the Parity Plan to add a cash balance
feature, which is called the Portable Pension Account. Eligible employees as of
May 31, 2003 had the option to make a one-time election to accrue future
pension benefits under either the cash balance formula or the traditional
pension benefit formula. In either case, employees retained all benefits
previously accrued under the traditional pension benefit formula and will
continue to receive the benefit of future compensation increases on benefits
accrued as of May 31, 2003. All eligible employees hired after May 31,
2003 are only eligible to participate in the Portable Pension Account feature.

FedEx maintains a tax-qualified, defined benefit
pension plan called the FedEx Corporation Employees Pension Plan (the Pension
Plan). The maximum compensation limit under a tax-qualified pension plan is
currently $210,000. The Internal Revenue Code also limits the maximum annual
benefits that may be accrued under a tax-qualified, defined benefit pension
plan. In order to provide 100% of the benefits that would otherwise be denied
certain management-level participants in the Pension Plan due to these
limitations, FedEx also maintains a supplemental non-tax-qualified plan called
the FedEx Corporation Retirement Parity Pension Plan (the Parity Plan). Benefits
under the Parity Plan are general, unsecured obligations of FedEx.

Effective May 31, 2003,
FedEx amended the Pension Plan and the Parity Plan to add a cash balance
feature, which is called the Portable Pension Account. Eligible employees as of
May 31, 2003 had the option to make a one-time election to accrue future
pension benefits under either the new cash balance formula or the traditional
pension benefit formula. In either case, employees retained all benefits
previously accrued under the traditional pension benefit formula and will
continue to receive the benefit of future salary increases on benefits accrued
as of May 31, 2003. All eligible employees hired after May 31, 2003
are only eligible to participate in the Portable Pension Account feature.